UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                                    FORM 10-Q

(Mark One)
[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
         SECURITIES  EXCHANGE ACT OF 1934
         For the quarterly period ended MARCH 31, 2001

                                       OR


[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
         SECURITIES EXCHANGE ACT OF 1934
         For the transition period from _______________ to _______________

         Commission file number 1-4169


                       TEXAS GAS TRANSMISSION CORPORATION
             (Exact name of registrant as specified in its charter)

                    DELAWARE                             61-0405152
         (State or other jurisdiction of              (I.R.S. Employer
         incorporation or organization)              Identification No.)


    3800 FREDERICA STREET, OWENSBORO, KENTUCKY              42301
        (Address of principal executive offices)          (Zip Code)

    Registrant's telephone number, including area code: (270) 926-8686
                                                        --------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No_

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date. 1,000 shares as of May 15, 2001
                                                 -------------------------------

REGISTRANT  MEETS THE CONDITIONS SET FORTH IN GENERAL  INSTRUCTIONS  H(1)(A) AND
(B) OF FORM 10-Q AND IS THEREFORE  FILING THIS FORM WITH THE REDUCED  DISCLOSURE
FORMAT.



<PAGE>


                       TEXAS GAS TRANSMISSION CORPORATION

                                TABLE OF CONTENTS



                                                                           PAGE

                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

          Balance Sheets - Assets .........................................  3

          Balance Sheets - Liabilities and Stockholder's Equity............  4

          Statements of Income.............................................  5

          Statements of Cash Flows  .......................................  6

          Condensed Notes to Financial Statements .........................  7

Item 2.   Management's Narrative Analysis of the Results of Operations..... 11


                           PART II. OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K................................. 13

SIGNATURE.................................................................. 14






Certain  matters  discussed in this report,  excluding  historical  information,
include forward-looking statements.  Although Texas Gas Transmission Corporation
believes such forward-looking statements are based on reasonable assumptions, no
assurance can be given that every  objective will be achieved.  Such  statements
are made in reliance on the "safe harbor" protections provided under the Private
Securities  Reform Act of 1995.  Additional  information about issues that could
lead to material  changes in performance is contained in Texas Gas  Transmission
Corporation's 2000 Annual Report on Form 10-K.


<PAGE>



                         PART I - FINANCIAL INFORMATION


ITEM 1.      FINANCIAL STATEMENTS

                       TEXAS GAS TRANSMISSION CORPORATION

                                 BALANCE SHEETS
                             (THOUSANDS OF DOLLARS)
                                   (UNAUDITED)

                                                       MARCH 31,    DECEMBER 31,
                  ASSETS                                 2001          2000
                                                      -----------   ------------
Current Assets:
    Cash and cash equivalents                          $       43     $      261
    Receivables:
       Trade                                                7,857          9,218
Affiliates                                                  2,612          2,610
       Other                                                  694          1,535
    Gas Receivables:
       Transportation and exchange                          2,203          1,543
       Storage                                              6,885          4,165
    Advances to affiliates                                 63,759         64,763
    Inventories                                            14,716         15,125
    Deferred income taxes                                  15,801         14,544
    Costs recoverable from customers                       15,283         15,894
    Gas stored underground                                  3,486          3,486
    Prepaid expenses                                          926          1,536
    Other                                                      18             18
                                                       ----------     ----------
       Total current assets                               134,283        134,698
                                                       ----------     ----------

Property, Plant and Equipment, at cost:
    Natural gas transmission plant                      1,012,258      1,011,447
    Other natural gas plant                               155,759        152,919
                                                       ----------     ----------
                                                        1,168,017      1,164,366
    Less -- Accumulated depreciation and
      amortization                                        171,822        166,857
                                                       ----------     ----------
       Property, plant and equipment, net                 996,195        997,509
                                                       ----------     ----------

Other Assets:
    Gas stored underground                                 83,365         91,307
    Costs recoverable from customers                       45,465         46,264
    Prepaid pension                                        32,620         31,469
    Other                                                   8,754         10,243
                                                       ----------     ----------
       Total other assets                                 170,204        179,283
                                                       ----------     ----------

       Total Assets                                    $1,300,682     $1,311,490
                                                       ==========     ==========


         The accompanying condensed notes are an integral part of these
                             financial statements.


<PAGE>



                       TEXAS GAS TRANSMISSION CORPORATION

                                 BALANCE SHEETS
                             (THOUSANDS OF DOLLARS)
                                   (UNAUDITED)


                                                         MARCH 31,  DECEMBER 31,
LIABILITIES AND STOCKHOLDER'S EQUITY                        2001        2000
                                                         ----------  -----------
Current Liabilities:
    Payables:
       Trade                                             $    2,524   $    1,043
       Affiliates                                             7,044       10,311
       Other                                                  2,564        7,213
    Gas Payables:
       Transportation and exchange                            1,176        5,011
       Storage                                                2,468        9,542
    Accrued income taxes due affiliate                       17,535       23,841
    Accrued taxes other                                      16,096       15,889
    Accrued interest                                          1,511        6,557

    Accrued payroll and employee benefits                    31,525       37,117
    Other accrued liabilities                                15,716        9,253
    Reserve for regulatory and rate matters                  22,070       10,473
                                                         ----------   ----------
       Total current liabilities                            120,229      136,250
                                                         ----------   ----------

Long-Term Debt                                              250,446      250,533
                                                         ----------   ----------

Other Liabilities and Deferred Credits:
    Deferred income taxes                                   171,222      165,842
    Postretirement benefits other than pensions              35,249       35,764
    Pension plan costs                                       32,620       31,469
    Other                                                    26,495       26,183
                                                         ----------   ----------
       Total other liabilities and deferred credits         265,586      259,258
                                                         ----------   ----------

Contingent Liabilities and Commitments

Stockholder's Equity:
    Common stock, $1.00 par value, 1,000 shares
       authorized, issued and outstanding                         1            1
    Premium on capital stock and other paid-in
       capital                                              630,608      630,608
    Retained earnings                                        33,812       34,840
                                                         ----------   ----------
       Total stockholder's equity                           664,421      665,449
                                                         ----------   ----------

       Total Liabilities and Stockholder's Equity        $1,300,682   $1,311,490
                                                         ==========   ==========


         The accompanying condensed notes are an integral part of these
                             financial statements.


<PAGE>


                       TEXAS GAS TRANSMISSION CORPORATION

                              STATEMENTS OF INCOME
                             (THOUSANDS OF DOLLARS)
                                   (UNAUDITED)


                                                    THREE MONTHS ENDED MARCH 31,
                                                          2001           2000
                                                        ---------      --------


Operating Revenues:
    Gas transportation                                  $ 84,287       $ 84,363
    Gas storage                                              577            724
    Other                                                  1,347          1,119
                                                        --------       --------
      Total operating revenues                            86,211         86,206
                                                        --------       --------

Operating Costs and Expenses:
    Cost of gas transportation                             1,203            156
    Operation and maintenance                             12,512         11,065
    Administrative and general                            12,520         14,788
    Depreciation and amortization                         11,419         11,382
    Taxes other than income taxes                          4,413          4,177
                                                        --------       --------
      Total operating costs and expenses                  42,067         41,568
                                                        --------       --------

Operating Income                                          44,144         44,638
                                                        --------       --------

Other (Income) Deductions:
    Interest expense                                       5,365          4,976
    Interest income from affiliates                       (1,269)        (1,492)
    Miscellaneous other income, net                          307             70
                                                        --------       --------
      Total other deductions                               4,403          3,554
                                                        --------       --------

Income Before Income Taxes                                39,741         41,084

Provision for Income Taxes                                15,769         15,908
                                                        --------       --------

Net Income                                              $ 23,972       $ 25,176
                                                        ========       ========


         The accompanying condensed notes are an integral part of these
                             financial statements.



<PAGE>



                       TEXAS GAS TRANSMISSION CORPORATION
                            STATEMENTS OF CASH FLOWS
                             (THOUSANDS OF DOLLARS)
                                   (UNAUDITED)


                                                    THREE MONTHS ENDED MARCH 31,
                                                            2001         2000
                                                         ----------  -----------

OPERATING ACTIVITIES:
    Net income                                             $ 23,972    $ 25,176
    Adjustments to reconcile to cash provided
     from operations:
       Depreciation and amortization                         11,419      11,382
Provision for deferred income taxes                           4,123       4,617
Changes in receivables                                       (1,178)     (5,160)
       Changes in inventories                                   409        (285)
Changes in other current assets                               1,168       5,159
Changes in accrued income taxes due affiliate                (6,306)      2,202
Changes in payables and accrued liabilities                 (17,503)    (35,418)
Changes in reserve for regulatory and rate matters           11,597        --
       Other, including changes in noncurrent assets
         and liabilities                                      5,122      28,066
                                                           --------    --------
Net cash provided by operating activities                    32,823      35,739
                                                           --------    --------

FINANCING ACTIVITIES:
           Dividends                                        (25,000)       --
                                                           --------    --------
           Net cash used in financing activities            (25,000)       --
                                                           --------    --------

INVESTING ACTIVITIES:
    Property, plant and equipment:
       Capital expenditures, net of allowance for
          funds used during construction                     (8,592)     (6,600)
       Proceeds from sales and salvage values,
          net of costs of removal                              (453)          6
     Advances to affiliates, net                              1,004     (29,232)
                                                           --------    --------
           Net cash used in investing activities             (8,041)    (35,826)
                                                           --------    --------

Decrease in cash and cash equivalents                          (218)        (87)
Cash and cash equivalents at beginning of period                261         266
                                                           --------    --------

Cash and cash equivalents at end of period                 $     43    $    179
                                                           ========    ========



         The accompanying condensed notes are an integral part of these
                             financial statements.


<PAGE>


                       TEXAS GAS TRANSMISSION CORPORATION
                     CONDENSED NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


A.  CORPORATE STRUCTURE AND CONTROL AND BASIS OF PRESENTATION

    Corporate Structure and Control

       Texas  Gas  Transmission  Corporation  (Texas  Gas) is  wholly  owned  by
Williams Gas Pipeline Company,  LLC (WGP), which is a wholly owned subsidiary of
The Williams Companies, Inc. (Williams).

    Basis of Presentation

       The financial statements have been prepared from the books and records of
Texas Gas without audit.  Certain information and footnote  disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The accompanying unaudited
financial statements include all adjustments,  both normal recurring and others,
which, in the opinion of Texas Gas' management,  are necessary to present fairly
its financial  position at March 31, 2001,  and results of  operations  and cash
flows for the  three  months  ended  March 31,  2001 and 2000.  These  financial
statements  should be read in conjunction with the financial  statements,  notes
thereto and management's  narrative analysis contained in Texas Gas' 2000 Annual
Report on Form 10-K.

       Certain reclassifications have been made in the 2000 financial statements
to conform to the 2001 presentation.

    Seasonal Variation

       Operating  income may vary by quarter.  Based on current rate  structure,
Texas Gas experiences  higher  operating income in the first and fourth quarters
as compared to the second and third quarters.


B.  CONTINGENT LIABILITIES AND COMMITMENTS

    Regulatory and Rate Matters and Related Litigation

      FERC Order 637

      On  February 9, 2000,  the FERC  issued a final rule,  Order 637, in which
FERC adopted certain  policies that it finds are necessary to adjust its current
regulatory model to the needs of the evolving  markets,  but determined that any
fundamental  changes to its regulatory  policy will be considered  after further
study and evaluation of the evolving marketplace.  Most significantly,  in Order
637, the FERC (i) revised its pricing  policy to waive,  for a two-year  period,


<PAGE>

the maximum price ceilings for short-term  releases of capacity of less than one
year, and (ii) permits  pipelines to file proposals to implement  seasonal rates
for  short-term  services  and  term-differentiated  rates,  subject  to certain
requirements  including the requirement that a pipeline be limited to recovering
its annual revenue  requirement under those rates.  Texas Gas submitted an Order
637  compliance  filing on August 15,  2000,  which  contained  pro forma tariff
sheets  designed to comply with certain  directives  in the order  regarding the
conduct of daily business  transactions.  A technical conference with FERC staff
and intervenors has been set for May 24, 2001 to discuss this further.

      General Rate Issues

      On April  28,  2000,  Texas Gas filed a  general  rate  case  (Docket  No.
RP00-260) which became effective November 1, 2000,  subject to refund.  This new
rate case reflects a requested  annual  revenue  increase of  approximately  $81
million,  based on filed  rates,  primarily  attributable  to  increases  in the
utility rate base,  depreciation  expense, rate of return and related taxes, and
revised system rate design quantities.  Texas Gas also proposes in this new rate
case to implement value-based, term-differentiated seasonal rates for short-term
services  effective November 1, 2000, as permitted by FERC Order 637. On May 31,
2000, the Commission  issued its "Order  Accepting and Suspending  Tariff Sheets
Subject to Refund,  Rejecting Other Tariff Sheets, and Establishing  Hearing and
Settlement Procedures" and established  administrative  procedures for the case.
Although the case was set for hearing,  the hearing was held in abeyance pending
the filing of additional  information  related to the value-based  rate proposal
for short-term firm  transportation  service.  Texas Gas made that  supplemental
filing on June 30, 2000. On October 27, 2000 the  Commission  issued an order on
that supplemental filing referring all issues in the case for hearing. Texas Gas
has been engaged in informal settlement negotiations under a procedural schedule
to  attempt  to  resolve  all  issues  without a formal  hearing.  Texas Gas has
provided  an adequate  reserve for  amounts,  including  interest,  which may be
refunded to customers.

      Royalty Claims and Producer Litigation

      In connection  with Texas Gas'  renegotiations  of supply  contracts  with
producers  to  resolve  take-or-pay  and other  contract  claims,  Texas Gas has
entered into certain  settlements which may require the indemnification by Texas
Gas of certain claims for royalties which a producer may be required to pay as a
result  of such  settlements.  Texas  Gas has  been  made  aware of  demands  on
producers  for  additional  royalties  and may receive  other demands that could
result in claims against Texas Gas pursuant to the indemnification  provision in
its  settlements.  Indemnification  for  royalties  will depend on,  among other
things,  the specific lease  provisions  between the producer and the lessor and
the terms of the settlement between the producer and Texas Gas.

      In June 1999, Texas Gas filed to recover  approximately $1.3 million (75%)
of such costs  pursuant to the  provisions  of FERC Order 528.  These costs were
collected over a twelve-month  period,  which ended June 30, 2000. Texas Gas has
provided reserves for the estimated settlement costs of other royalty claims and
litigation.

      Environmental Matters

      As of March  31,  2001,  Texas  Gas had a reserve  of  approximately  $1.4
million  for  estimated  costs  associated  with  environmental  assessment  and

<PAGE>

remediation,  including  remediation  associated  with  the  historical  use  of
polychlorinated biphenyls and hydrocarbons.  This estimate depends upon a number
of  assumptions  concerning  the scope of  remediation  that will be required at
certain locations and the cost of remedial measures to be undertaken.  Texas Gas
is continuing to conduct environmental assessments and is implementing a variety
of remedial  measures  that may result in  increases  or  decreases in the total
estimated costs.

      Texas Gas currently is either named as a potentially  responsible party or
has received an  information  request  regarding  its potential  involvement  at
certain  Superfund and state waste disposal sites.  The anticipated  remediation
costs,  if any,  associated  with these sites have been  included in the reserve
discussed above.

      Texas Gas is also  subject to the federal  Clean Air Act (CAA) and the CAA
Amendments  of 1990  (Amendments)  which  added  significant  provisions  to the
existing federal CAA. The Amendments require the Environmental Protection Agency
(EPA) to promulgate new regulations  pertaining to mobile  sources,  air toxics,
areas of ozone  non-attainment,  and acid rain. Texas Gas operates facilities in
some areas  designated as  non-attainment  for the current ozone standard and is
aware that the EPA may  designate  additional  non-attainment  areas during 2001
which  may  potentially   impact  Texas  Gas'   operations.   Emission   control
modifications of compression  equipment located at facilities required to comply
with current federal CAA provisions,  the Amendments,  and State  Implementation
Plans for NOx reductions are estimated to cost in the range of $6 million to $14
million by May 2004 and will be recorded as  additions  to  property,  plant and
equipment as the  facilities  are added.  If the EPA  designates  additional new
non-attainment  areas in 2001 which  impact Texas Gas'  operations,  the cost of
additions to  property,  plant and  equipment is expected to increase;  however,
Texas  Gas is unable at this time to  estimate  with any  certainty  the cost of
additions  that  may  be  required.  Moreover,  new  regulations  pertaining  to
Hazardous Air Pollutants  (HAPs) are anticipated to be promulgated  during 2001,
which may require emission controls in addition to the controls mentioned above.
Texas Gas cannot  predict the costs with any  certainty  at this time  resulting
from the installation of these controls.  The effective  compliance date for the
HAPs  regulations and  installation of associated  controls is anticipated to be
during 2003.

      Texas Gas considers environmental assessment, remediation costs, and costs
associated  with  compliance  with  environmental  standards  to be  recoverable
through  rates,  as they are prudent  costs  incurred in the ordinary  course of
business.  The actual costs incurred will depend on the actual amount and extent
of contamination discovered,  the final cleanup standards mandated by the EPA or
other governmental authorities, and other factors.

      Other Legal Issues

      In 1998, the United States  Department of Justice  informed  Williams that
Jack  Grynberg,  an individual,  had filed claims in the United States  District
Court for the District of Colorado  under the False Claims Act against  Williams
and certain of its wholly owned  subsidiaries  including Texas Gas. Mr. Grynberg
has also filed  claims  against  approximately  300 other energy  companies  and
alleges that the defendants violated the False Claims Act in connection with the
measurement  and purchase of  hydrocarbons.  The relief sought is an unspecified
amount  of  royalties  allegedly  not  paid to the  federal  government,  treble
damages,  a civil penalty,  attorneys'  fees,  and costs.  On April 9, 1999, the

<PAGE>

United States Department of Justice announced that it was declining to intervene
in any of the Grynberg qui tam cases,  including  the actions  filed against the
Williams  entities  in the United  States  District  Court for the  District  of
Colorado.   On  October  21,  1999,  the  Panel  on  Multi-District   Litigation
transferred all of the Grynberg qui tam cases,  including the ones filed against
Williams,  to the United States  District  Court for the District of Wyoming for
pre-trial  purposes.  Motions  to  dismiss  the  complaints,  filed  by  various
defendants including Williams, are pending.

      On May 2, 2000 a flash fire occurred at Texas Gas' Greenville, Mississippi
compressor  station injuring six contract  employees and one Texas Gas employee.
One contract employee died while in the hospital.  A lawsuit was filed on behalf
of the  contract  employee  against  Texas Gas;  however,  damages have not been
specified.

      Summary of Contingent Liabilities and Commitments

      While no  assurances  may be given,  Texas Gas does not  believe  that the
ultimate  resolution of the foregoing matters taken as a whole,  based on advice
from counsel and after  consideration  of amounts accrued,  insurance  coverage,
potential recovery from customers or other  indemnification  arrangements,  will
have a  materially  adverse  effect on Texas  Gas'  future  financial  position,
results of operations or cash flow requirements.


C.  ADOPTION OF ACCOUNTING STANDARDS

      In June 1998,  the  Financial  Accounting  Standards  Board (FASB)  issued
Statement of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting  for
Derivative  Instruments and Hedging  Activities." This was followed in June 2000
by the issuance of SFAS No. 138, "Accounting for Certain Derivative  Instruments
and Certain Hedging Activities," which amends SFAS No. 133. SFAS No. 133 and No.
138 establish  accounting  and  reporting  standards  for  derivative  financial
instruments.  The standards require that all derivative financial instruments be
recorded on the balance sheet at their fair value.  Changes in the fair value of
derivatives  will be recorded each period in earnings if the derivative is not a
hedge.  If a derivative is a hedge,  changes in the fair value of the derivative
will either be recognized in earnings along with the change in the fair value of
the hedged asset,  liability or firm  commitment  also recognized in earnings or
recognized in other comprehensive  income until the hedged item is recognized in
earnings.  For a  derivative  recognized  in  other  comprehensive  income,  the
ineffective  portion of the derivative's change in fair value will be recognized
immediately in earnings.  Texas Gas adopted these standards effective January 1,
2001 with no financial impact to results of operations or financial position.








<PAGE>


ITEM 2.  MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS
                  (FILED PURSUANT TO GENERAL INSTRUCTION H)


                        FINANCIAL ANALYSIS OF OPERATIONS
                  THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO
                        THREE MONTHS ENDED MARCH 31, 2000

      Operating  income was $0.5 million  lower for the three months ended March
31,  2001,  than for the three  months  ended March 31,  2000.  The  decrease in
operating  income was due  primarily  to higher cost of gas  transportation  and
operation and maintenance  costs.  Decreases to operating  income were partially
offset by decreased general and administrative costs.

      Operating  revenues  were  comparable  to the prior  year.  Higher  rates,
subject to refund,  from Texas Gas' current rate case (Docket No.  RP00-260) and
higher revenues from new services were generally  offset by lower tracked costs,
which are passed  through to customers,  lower  revenues from  traditional  firm
services and lower  throughput.  Total deliveries were 200.3 Tbtu and 218.9 Tbtu
for the first quarter of 2001 and 2000, respectively. The decrease in throughput
was  due  primarily  to  lower  transportation  volumes  to  processing  plants.
Generally,  transportation  of  this  gas is for a  relatively  short  distance;
therefore the revenue associated with this transportation is minimal.

      Operating costs and expenses increased $0.5 million primarily attributable
to higher costs of gas  transportation  of $1.0 million and higher operation and
maintenance costs of $1.4 million.  The increase in operating costs and expenses
were partially offset by a $1.4 million decrease in  administrative  and general
costs  resulting from the 2000 office  consolidation  of Texas Gas with Williams
Gas Pipelines Central,  Inc. and lower tracked costs which are passed through to
customers.

                        FINANCIAL CONDITION AND LIQUIDITY

     Texas Gas is a  participant  with  other  Williams  subsidiaries  in a $700
million  credit  agreement  under which Texas Gas may borrow up to $200 million,
subject to borrowings by other  affiliated  companies.  Interest rates vary with
current market conditions.  To date, Texas Gas has no amounts  outstanding under
this facility.

     As of March 31,  2001,  Texas Gas has $100  million  of shelf  availability
remaining under a Registration  Statement filed with the Securities and Exchange
Commission in 1997.

     As a  participant  in  Williams'  cash  management  program,  Texas Gas has
advances to and from Williams through Texas Gas' parent company,  WGP.  Advances
are represented by demand notes. The interest rate on intercompany  demand notes
is the  London  Interbank  Offered  Rate on the first  day of the month  plus an
applicable margin based on the current Standard and Poor's Rating of Texas Gas.

     Texas Gas expects to access public and private capital markets,  as needed,
to finance its own capital requirements.
<PAGE>

     Texas Gas' capital expenditures for the first three months of 2001 and 2000
were $9.0 million and $6.6 million, respectively.  Capital expenditures for 2001
are expected to approximate $104.3 million.

     Texas Gas' debt as a percentage of total  capitalization  at both March 31,
2001 and December 31, 2000 was 27.4%.

      On April  28,  2000,  Texas Gas filed a  general  rate  case  (Docket  No.
RP00-260) which became effective November 1, 2000,  subject to refund.  This new
rate case reflects a requested  annual  revenue  increase of  approximately  $81
million,  based on filed  rates,  primarily  attributable  to  increases  in the
utility rate base,  depreciation  expense, rate of return and related taxes, and
revised system rate design quantities.  Texas Gas also proposes in this new rate
case to implement value-based, term-differentiated seasonal rates for short-term
services  effective November 1, 2000, as permitted by FERC Order 637. On May 31,
2000, the Commission  issued its "Order  Accepting and Suspending  Tariff Sheets
Subject to Refund,  Rejecting Other Tariff Sheets, and Establishing  Hearing and
Settlement Procedures" and established  administrative  procedures for the case.
Although the case was set for hearing,  the hearing was held in abeyance pending
the filing of additional  information  related to the value-based  rate proposal
for short-term firm  transportation  service.  Texas Gas made that  supplemental
filing on June 30, 2000. On October 27, 2000 the  Commission  issued an order on
that supplemental filing referring all issues in the case for hearing. Texas Gas
has been engaged in informal settlement negotiations under a procedural schedule
to  attempt  to  resolve  all  issues  without a formal  hearing.  Texas Gas has
provided  an adequate  reserve for  amounts,  including  interest,  which may be
refunded to customers.















<PAGE>


                           PART II - OTHER INFORMATION



ITEM 6.         EXHIBITS AND REPORTS ON FORM 8-K

                (a)   Exhibits

                      None


                (b)   Reports on Form 8-K

                      None





<PAGE>













                                S I G N A T U R E


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                             TEXAS GAS TRANSMISSION CORPORATION



DATE:   May 15, 2001                     BY:      /s/ S. W. Harris
       ------------------------               ----------------------------
                                                      S. W. Harris
                                         Controller and Chief Accounting Officer